Lebanon: oil & gas as a rallying point?

December 2014 – June 2015 – December 2015 – June 2016. Every six months, with Swiss-like precision, Speaker Nabih Berri makes another attempt to reactivate the oil and gas file.

Berri invokes the threat posed by Israel to Lebanese sovereignty and Lebanese resources. Invoking the threat is intended as a rallying call, and is hoped to generate enough backing among the political class to initiate progress. The objective is to put the two missing decrees on the government’s agenda (a decree defining offshore blocks and their coordinates, and another one approving the tender protocol and the model exploration and production agreement). Lebanon’s first licensing round, launched in May 2013, has been on hold since, and cannot be completed in the absence of these two decrees.

Berri’s latest attempt to push the oil and gas file forward comes a few weeks after Special Envoy and Coordinator for international Energy Affairs at the U.S. State Department Amos Hochstein visited Lebanon on May 26, 2016.

In this note, reserved for its clients, MESP addresses the motivations behind Berri’s latest move. Exploiting potential oil and gas resources (i) is seen as a unifying project that benefits all Lebanese; (ii) could boost a much-needed economic recovery; (iii) is increasingly perceived, rightly or wrongly, as able to compensate financial difficulties and pressures on the banking sector and (iv) would trigger a renewed interest from foreign partners in Lebanon.

Berri’s attempts have not been successful so far. In the past, some of his political opponents did not seem convinced about alleged Israeli threats at this stage, and believed the argument was only meant to intimidate them in order to rally behind him. But Berri, at least, has the merit of trying. Fourth time’s the charm? Hopefully we won’t have to wait until December 2016 for a situation update. Electing a new President in the meantime would facilitate the task.